Green industrial policy is valuable for accelerating the development and deployment of technologies that both mitigate climate change and deliver greater security of supply. Done strategically and competently, it can also generate substantial commercial gains.
China’s success with long-term green industrial policy has pushed first the United States and subsequently Europe to launch green industrial policies of their own. A green race to the top is in principle a positive development, but the EU’s capacity to conduct industrial policy is constrained both by being a union of differing member states and by the market-based foundations of the union itself.
Despite Denmark’s historical success with green industrial policy in wind energy, Denmark has shown only a reluctant acceptance of the shift in the spirit of the times and in the political and economic circumstances.
The time has come for Denmark to enter the contest to develop the green technologies of the future in a more wholehearted, long-term and strategic way. This will benefit Denmark’s own transition and create new commercial opportunities alike.
Succeeding will require green industrial policy to be integrated with the long-term vision for the transition, more risk-tolerant and patient capital, and new methods for justifying strategic bets.
The energy system of the future requires new technology. We need an industrial policy that helps bring forward solutions which both support and benefit from the energy transition.
Green technologies are typically capital-intensive and slow to develop and deploy. That leaves green technology at a disadvantage relative to, for example, IT and pharmaceuticals, which find it easier to attract capital.
There is a need to develop new methods for formulating and justifying strategic bets. This concerns, among other things, the vision for the domestic market, green areas of strength, and sectors with global influence.
